Published Monday, June 7, 1999, in the Miami Herald
Once-dormant firm creates a stir with new strategy
JAMES McNAIR
Herald Business Writer
If there's a decanter of horse shampoo in your shower tray, you can credit that personal hygiene tip to William Roger Dunavant. And if you ever bought a pornography-downloading accelerator from a company called Verinet, you can thank Dunavant for that handy-dandy device, too.
But if you were lucky enough to have been tipped off to buy shares of Corsaire at the first of the year, you would owe Dunavant the most gratitude of all. On Jan. 4, Corsaire shares quoted at less than 50 cents each on the Nasdaq's anything-goes Electronic Bulletin Board. On May 3, the stock topped $30.
You needn't ask how Corsaire pulled that off. Yes, this is a story about an Internet company. And, yes, that company is based in South Florida, home of more would-be overnight sensations than stock watchers can keep up with.
For the past several years, Corsaire was a publicly traded, but dormant corporate shell with no assets or revenue. Its biggest shareholder was -- and still is -- a Vancouver investor with a history of run-ins with Canadian securities regulators. Its stock didn't show a pulse until last November, when it hired Dunavant as president and moved from San Diego to Fort Lauderdale.
Dunavant, 46, wasted little time moving Corsaire into what was becoming the jet set of industries -- the Internet. In a flurry of announcements beginning Jan. 12, Corsaire changed its name to Net Command Tech and launched a web site (www.netcommandtech.com). It claimed its technology is superior -- better and cheaper -- to well-established players like RealNetworks. It proclaimed its intent to become the ''recognized market leader and pioneer in the delivery of multimedia services on the World Wide Web.''
Net Command Tech's stock has cooled down, closing at $13.19 on Friday, but its hype is as resonant as ever.
The company acquired its initial source of technology from Baraka Intracom in England on Jan. 18. In an interview Thursday, Dunavant said Baraka's video-surveillance product lets users visually monitor their home or company ''from anywhere in the world.'' Another product, called MediaPhone, can turn a home computer into an Internet ''broadcasting company.''
That suggests Net Command Tech pulled off the coup of the century by buying such wondrous technology in a liquidation sale for 3 million of its speculative shares.
In any case, its checkout lanes haven't exactly been humming ever since. The Baraka products accounted for $16,547 in sales during the first quarter of 1999 and are shaping up to hit $30,000 in the second quarter.
RealNetworks, the Seattle company and maker of RealAudio, chose not to respond to Net Command Tech's superiority claims.
''We don't consider them a competitor,'' said RealNetworks spokeswoman Jenny Sorensen.
In Dunavant's way of thinking, the paltry sales are just a prelude.
Straight Arrow
From 1989 to 1995, Dunavant was president of Straight Arrow Products, a Bethlehem, Pa., maker of horse shampoo, hoof moisturizer and such. The company had confined itself to the equine market, generating $500,000 in revenue in 1990.
Enter Dunavant. Pitching its Maine 'n Tail shampoo for human use, Straight Arrow became a raging success. Ernst & Young hailed him as one of its entrepreneurs of the year in 1995, and People magazine ran a photo of him taking a bubble bath with his kids. Straight Arrow was named to Advertising Age's Marketing 100 list in 1996.
''I took over a company that was 25 years old, had three products and less than $500,000 in sales,'' Dunavant said. ''When I left, it had 40 products, grew from seven employees to over 150, and had $44 million in sales.''
But the family that founded and still owned half of Straight Arrow sued Dunavant, accusing him of paying himself excessively and siphoning company assets into companies owned by his family. A Pennsylvania court ordered him to pay back $4.5 million, an amount Dunavant said was reduced to ''nickels'' by an out-of-court settlement.
That's when Dunavant crossed the chasm from equine cosmetics into electronics.
In 1997, Dunavant wound up working for a Fort Lauderdale company called Verinet, which offered a program to compress video images for faster transfer over phone lines. Working the floor at a computer pornography convention in Las Vegas, Dunavant told a reporter the product was perfect for quick porn downloads.
Busted merger
''People want to see it, do it and get out of a site fast,'' he told the San Francisco Chronicle.
Dunavant left Verinet over a failed attempt to merge the company with the developer of its video-compression technology, Summus Technologies, also in Fort Lauderdale.But Summus didn't produce finished products fast enough for Dunavant, and he left. Summus declined to discuss Dunavant's departure or his business contributions.
Dunavant seems to be more firmly in charge at Net Command Tech. He said the company has solved its liquidity problems by raising $3.7 million from private investors. He is spearheading the purchase of a St. Petersburg company, Satellite Access Systems (SAS), a satellite communications company, for 2.35 million shares of stock and incentives of 1.6 million more.
Dunavant considers SAS, which had about $250,000 revenue in 1998, key to Net Command Tech's overall business plan. SAS software, he said, will enable people to send or receive data by radio wave at 103 times the speed of ultra-fast T1 lines.
''You basically can unplug your computer from the wall, and we give you a little box with rabbit ears and you are now cellularly hooked up to our private network,'' Dunavant said. ''You'll be able to send a fax, videoconference or surf the Net at speeds no one has seen before.''
In a testimonial letter, Marc Stringer, a systems engineer with Natural MicroSystems in Marietta, Ga., praised the SAS technology.
''The satellite transmission from New York City to Monterey, Mexico, is simply amazing in terms of how fast and reliably we are able to communicate both voice and the exchange of data files between both sites,'' Stringer wrote.
Dunavant said the technology will be launched in the St. Petersburg-Tampa area in 90 days and will help put Net Command Tech in the black by year-end. Asked how a startup company with little money, no institutional backing and no deep-pocketed partners could pounce on such an opportunity ahead of the likes of AT&T and MCI Worldcom, he said, ''Why didn't IBM suck up Bill Gates when they were introduced to him?''
Splitsville
Net Command Tech has about 16 million outstanding shares, giving the company a market cap of $211 million as of Friday's closing price. That's pretty hefty for a company with $16,547 in first-quarter revenue. And it hasn't immunized it from regressing to the untutored penny stock it was.
On May 10, Dunavant was so pleased with the runup in stock price that he announced a 3-for-1 split to take place June 1.
Slight problem. The company realized later it didn't have enough shares to accommodate the split. It canceled the split May 27 -- but didn't make much of an effort to let the world know. The Bloomberg ticker, left in the dark, momentarily adjusted the company's historic prices to reflect the split. Dunavant shouldered the blame.
''The books were all over the place. We were chasing all sorts of things,'' he confessed. ''It was a bone-headed error.''
e-mail: jmcnair@herald.com
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The above article can be found by going to herald.com and searching for "Net Command".
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